-
Another report on Football Finances has been released. This one is from PKF Accountants and Business Advisors. The 22-page report, interesting for what it says about football in general, rather than specific to - or even mentioning - QPR, is entitled "Under Pressure: Is it Time for the Industry to Go on the Defensive? -The Annual Survey of Football Club Finance Directors 2008" can be downloaded for free
From PKF Accountants and Business Advisors
One of the strongest themes of our seventh annual survey of football club finance directors is evidence of increasing financial pressure on the English Premier League (EPL) clubs. While all clubs are starting to feel the bite of the credit crunch on their sales of tickets, merchandising and corporate hospitality, the EPL FDs are reporting a more widespread set of financial challenges and pressures than in previous years.
PKF’s Football Industry Group commissioned an independent research company in June and July 2008 to undertake structured telephone interviews with finance directors of football clubs. A total of 37 interviews were completed with finance directors in the English Premier League, Football League Championship, Football Leagues One and Two, Scottish Premier League and Scottish First Division. All responses were recorded anonymously to ensure the confidentiality of the respondent.
To find out more about our Football industry group please click here.
Please click here or on the publication image to download this survey in pdf format, you will need to complete your name, email address and post code. - PKF
FOREWORD
For the first time ever, one of the strongest themes of our seventh annual survey of football club finance directors is evidence of increasing financial pressure on the English Premier League (EPL) clubs. While all clubs are starting to feel the bite of the credit crunch on their sales of tickets, merchandising and corporate hospitality, the EPL FDs are reporting a more widespread set of financial challenges and pressures than in previous years.
For example, fewer are expecting to make a pre-tax profit; more are under pressure from their banks; more are using over 90% of their overdraft facilities; and more are finding it harder to source finance. These pressures are manifesting themselves in smaller budgets for the first team squad; freezing of payroll costs and the first real attempts to link player salaries to performance on the pitch.
With new television deals in place both in England and Scotland, the potential fall in TV income has been replaced by the ability to attract new sponsorship as one of the FDs leading concerns, rising from 14% last year to 51%. So it is surprising that a majority of clubs remain optimistic that their revenue from sponsorship will increase in the coming year – and most of these think the growth will be more than last year. That said, the number that expect no growth in this area has risen significantly since our last survey. It is likely, too, that the optimism is largely down to existing deals that have some years left to run – rather than good prospects of securing new deals. As the credit crunch prompts potential sponsors to review the level of funds available to market their business, clubs may well feel the knock-on effect.
This year we have introduced some new questions; 62% of FDs confirm that the wages to turnover ratio is a key performance indicator, with 75% of respondents using a benchmark between 50% to 65%. Worryingly, 17% of clubs use a benchmark greater than 65%, which almost certainly means they will be loss making. Furthermore, 14% of FDs describe their clubs’ finances as being ‘in need of attention’ or worse.
It will be an interesting season as we see how clubs manage these financial pressures when faced with demands to buy players to produce results that mean enhanced league positions.
We believe the current pressurised climate is here for some time to come, and it is therefore important to the long-term stability of the industry that money matters are controlled.
We hope you find the survey of interest and our thanks to all those who gave their time and views to enable us to create this insight into the state of the game’s finances. As usual, we have made a donation to the PFA Benevolent Fund for each completed survey."
Charles Barnett Partner, Football Industry Group
EXECUTIVE SUMMARY
FINANCING THE CLUB
Ticket sales still the most important income source
Ticket sales continue to be the biggest source of income for football clubs but their importance has slipped slightly for all leagues over the last 12 months, while alternative uses for the stadium, new media and ground naming rights have increased in importance.
TV and radio deals constitute the most important income stream for the EPL.
TV and radio deals generate most income growth
The predominance of the role of TV and radio deals in football is even stronger this year with 41% of respondents – and 78% of EPL respondents – saying that TV and radio deals generated the biggest percentage increase last season – up from 20% last year.
Sponsorship revenue continues to increase
Sponsorship revenue increased for 57% of clubs last season and the majority of football clubs (62%) are confident of sustaining and growing their sponsorship revenue in the 2008/09 season.
Credit crunch bites into match ticket sales, merchandising and corporate entertainment
The three revenue streams most affected by the credit crunch are match tickets, merchandising and corporate entertainment. The EPL has been most affected by the decline in corporate hospitality spending while the most significant impact of the credit crunch for other leagues is on ticket sales.
EPL under more financial pressure
More EPL clubs have been under increasing pressure from their banks – up from 31% to 44% this year. There is also a sharp rise in the percentage of EPL clubs planning to use more than 90% of their overdraft facility from 46% in 2007 to 89% this year.
A third of EPL respondents have had problems sourcing finance this year – up from just 8% in 2007.
Additionally, there is a significant increase in the percentage of EPL clubs with debt funding guaranteed by a director or shareholder - up to 89% of respondents from 54% last year.
PLAYER COSTS
More EPL clubs cut first team budgets
Two thirds of EPL respondents say they will be reducing their first team squad size this season – up from only 15% in 2007. This contrasts with 44% of EFLC clubs who will be increasing squad size – up from 33% in 2007.
However, there is no let up in payroll costs – 59% of respondents are budgeting to spend more on the first team squad salaries this year. The only league where the percentage of clubs spending more on player salaries has fallen is the EPL – a dramatic drop from 69% in 2007 to 33% this year.
More clubs using performance-related pay
There is a significant incr ease in the percentage of clubs making between 10 and 25% of player’s pay dependent on their performance. This has increased from 34% in 2007 to 54% this year. The most noticeable increase is in the EPL where 78% of respondents are now applying performance-related criteria to between 10 and 25% of the first team squad’s salary. Last year only 31% of clubs were doing this.
More transfer budgets frozen
Fewer clubs will be increasing their transfer budget this season and the majority (59%) will be sticking to the same levels as last year. Only the EFLC have a larger percentage of clubs that will be increasing their budget this year.
Attitudes towards football agents harden
The reputation of football agents continues to fall within the football industry. More than half of respondents consider agents to both hinder negotiations and add cost – up from 44% last year.
The strongest detractors of agents are the EFLC (78%) and the SPL (75%).
When asked if they thought that agents are becoming more powerful and influential, only a third (32%) think they are while 14% think they have less influence.
INVESTING IN THE CLUB
More ground investment across all leagues
More clubs are planning on investing in their grounds this year – up to 76% from 58% last year.
The greatest percentage increase is from EFLC clubs where the percentage has risen from 44% in 2007 to 89% this season.
Attracting external investment most important for EFLC clubs
It is ‘very important’ or ‘quite important’ to 68% of respondents to attract significant investment from external investors. It is very important to more than half (56%) of EFLC respondents.
The main reason for attracting external investment is still to develop the stadium although the percentage of EPL clubs giving this reason has fallen from 83% last year to just 33% this year.
Players’ salaries still the biggest concern
For the fifth year running, the inflexibility of players’ salaries continues to top the list of FDs’ concerns although this is now joined by the ability to attract sponsorship – up from 14% in 2007 to 51% this year. Not surprisingly, the fear of relegation is also a major concern to the EPL (67%).
TABLE OF CONTENTS
Foreword 04
Methodology and sample profile 05
Executive summary 06
Analysis of key findings
– Financing the club 08
– Player costs 14
– Investing in the club 17
PKF services to football clubs 22
See Full report at PKF
PKF
Welcome to QPR REPORT - A completely unofficial and unaffiliated fan site focusing on G-d's Chosen Team, Queen's Park Rangers (QPR) FC. (Visit also QPR Report Messageboard and Follow on Twitter.) QPR Report accepts no sponsorship, advertising or financial contributions. In 2008, QPR Report was named as one of the top two blogs in the Football League
QPR Report Twitter Feed
Thursday, August 14, 2008
Football Finances Report - Survey of Football Club Finance Directors
Blog Archive
-
▼
2008
(1621)
-
▼
August
(154)
- Bernie Ecclestone on QPR - Not Got The Football Bug!
- Ex-QPRs in Action and Flashbacks: Wilks' Higbury G...
- QPR's Strong Draw at Bristol City - Reports and Co...
- Ten Man QPR Draw at Bristol City - Early Reports
- Teams: QPR Vs Bristol City
- Carling Cup Draw: QPR Drawn Away to Aston Villa - ...
- Previewing QPR's Visit to Bristol City
- "Lesema Can become Next Messi or Maradona"
- Snippets - Bristol City on QPR...Ben Watson?...Eir...
- Ledesma at QPR and Paladini's Response
- QPR Coach Bobby Ross Retiring - (The Amended State...
- Bristol City's Captain Snippet - "A lot of money ...
- QPR Not Rushing To Make Ledesma Signing Permanent
- QPR Snippets - Praise, Snideness and Rumour
- QPR Injury Update: Buzsaky, Vine and Hall
- Brian Glanville Perspective of QPR
- Updated: Frazier Campbell for QPR? (Newspaper Goss...
- Two QPR Birthdays...Richard Langley and Chis Day N...
- Tim Flowers NOT Yet Happy With QPR ...Nick Ward Ge...
- Carlisle-Area Perspectives of QPR Game - "United A...
- Football-Related Train Arrest Statistics
- Mahon and Ainsworth Speaking re QPR
- Dowie Would Like a Striker But Doesn't Much Expect...
- Cook Explains His Fulham Injury
- Updated - QPR's Carlisle Success - Additional Repo...
- Dowie Makes it Four Wins Out of Five - Reports and...
- Teams for QPR vs Carlisle
- Additional Carlisle QPR Previews
- QPR Snippets: Carlilse, Bowles and Masson...Lookin...
- Ian Holloway Talking About QPR's Prospects, Managi...
- QPR Flashbacks: "On This Day" - Opening Day Result...
- QPR's Doncaster Win - Additional Reports and Post-...
- Flashback: Barry Bridges Makes His QPR Debut - For...
- Terry Venables's QPR Return?...Davide Succi's Brace
- Match Reports and Comments....Comparing QPR's Star...
- QPR Vanquish Doncaster Rovers! Match Reports
- Teams: QPR vs Doncaster Rovers: Cerny Remains in G...
- Snippets - Delaney's Foreign Warning... Assessing ...
- On This Day: The Sublime (QPR's Incredible Bowles ...
- QPR Returning for Cranie Loan?...Ainsworth on Defe...
- "QPR Can be The New Chelsea" Comments of Parejo Be...
- QPR Snippets II: Doncaster's Manager on Big (Physi...
- Parejo Keeps Speaking - Compares QPR to Chelsea
- Previewing QPR vs Doncaster
- Snippets: Goalie and Ex-Captain Birthdays...Connol...
- No Salgado at Loftus Road?
- Parejo Aiming High! - "I Can Be The New Torres"
- QPR's Gavin Mahon on QPR's Foreign Loans and on No...
- Previewing Doncaster - Ex-QPR and Doncaster's Rufu...
- QPR Snippets - No Bodgani...Buzsaky Abused...Succi...
- Flashbacks: On This Day - Jim Gregory's Revolution...
- Snippets: Les Ferdinand Lauds Roy Wegerle and Ferd...
- QPR After Hajduk Split's Nikola Kalinic?....Trials...
- Ali Russell: No Near-Term Plans to Move...Ainswort...
- Damien Delaney on Playing for QPR and Ireland --- ...
- Snippets: Closed Door West Ham Friendly Ends in Dr...
- On This Day....QPR Games of Note
- No QPR-Genoa Friendly
- QPR Snippets: Managerial Sack & Promotion Odds---L...
- QPR Life Rope? Clubs Get One Extra Day To Buy Play...
- Next Up for QPR: Doncaster Rovers at Loftus Road -...
- Snippets: QPR Flops...Agyemang Recovery...Exiting ...
- "In Case You Missed It" - QPR-Related Items Over a...
- QPR's Loss - Sheffield United's Game
- Snippets: Dowie Acknowledges May Need Goalscorer.....
- QPR's Week in Perspective
- Football and Finances: Championship NOT Fourth Mos...
- QPR's Suffer Worst Loss to Sheffield United
- QPR's Loss to Sheffield United - Match Reports
- QPR's Unbeaten Record Ends as They Crash at Sheffi...
- QPR Fan Magazine AKUTRs Goes Online
- One Year Ago, QPR Appeared On The Brink...Ex-QPR S...
- Football's Richest Club Owners: #1 ...QPR's Lakshm...
- Snippets: Carlisle Response to QPR Draw....Ex-QPRs...
- Snippets: Ex-QPR Birthday...Leigertwood Assessed.....
- QPR's Next Challenge: Sheffield United
- Assessing QPR's Season Thus Far
- Snippets: Lee Cook Rubbishes Rumours...Harrow Win....
- Q&A With Dave McIntyre re QPR
- QPR Payments to Agents - Football League's Latest ...
- Football Finances Report - Survey of Football Club...
- Cup: QPR Face Club That Gave Us Stan Bowles
- Football League's Latest Agents Report is Out
- Snippets II - Simone Pavan Training With QPR....Ch...
- Carling Cup Draw Tonight
- Dowie's Selection "Problems"...Leigertwood's Desir...
- Agyemang Joins Delaney and Gorkss With an Internat...
- Snippets: QPR Player Interest...Further Swindon Re...
- QPR's 100% Start Continues! Victory at Swindon - R...
- Updated: Swindon vs QPR - Team Lineups
- Snippets: Ex-QPR Youth Ricky Sappleton Update
- Davide Succi for QPR? - "Succi: Offerta dal QPR di...
- QPR Deny Moving to Harrow
- QPR Not Yet Among the Top Clubs - World Rankings
- Swindon versus "The Chelsea of the Championship" -...
- No Ifil, No Kanyuka for Swindon vs QPR
- Making...Championship "Team of The Week"
- Snippets: A Concept QPR Could Emulate....Ex-QPRs U...
- QPR's Opening-Day Victory - Match Reports and Pres...
- QPR Interest in Chievo's Erjon Bogdani?
-
▼
August
(154)